KUALA LUMPUR: Specific programmes and incentives for the agriculture and food-related manufacturing sectors are expected to be included in the 12th Malaysia Plan (12MP), according to MIDF Research.
These initiatives would encourage food industry players to adopt the smart farming concept as championed by the UN Food and Agriculture Organisation (FAO), the research house said.
“Apart from 12MP, we view extensive strategies for the food sector to be detailed in the Malaysia Agro-food Policy 2021-2030 and Fourth Industrial Master Plan 2021-2030,” it noted in its research note today.
The 12MP is scheduled to be tabled in August this year.
Smart farming is a farming management concept utilising modern technologies such as GPS, soil scanning, data management and IoT technology to boost the quantity and quality of agricultural products.
MIDF Research said expanding the domestic supply of food products would reduce the country’s food trade deficit, taper food inflation and create a higher value-added industry to the overall economy.
It pointed out that the widening agriculture trade deficit is caused by the rising imports of food, reflecting strong domestic demand.
“Fish, meat, vegetable and fruit items are among the high-demand food products, constituting a higher consumer price index weightage than other items,” it said.
A 2019 study showed vegetables and fruits were the largest contributor to the trade deficit at RM6.0 bil, followed by cereals, meat and sugar and honey, at RM5.0 bil, RM2.9 bil and RM2.5 bil, respectively
Addressing food affordability is the most important issue to mitigate the high cost of living, it stressed.
The problem is further compounded given that most of the food products are imported and hence highly exposed to currency movements, with a slight depreciation of the ringgit directly affecting food prices and causing inflationary pressure, it noted.
It said the agriculture sector’s contribution to gross domestic product has plateaued at 8%-10% since 2005, while the primary sector has grown at a modest rate with the higher emphasis given to the palm oil sector.
Interestingly, MIDF Research said, the food manufacturing sector has grown at a higher rate than the overall manufacturing sector.
“Given the robust growth, there are ample opportunities for the agriculture sector to grow, especially post-2020, as the supply from this primary sector is still insufficient to meet the growing demand from the food manufacturing sector,” it said.
In the meantime, higher emphasis on the agriculture sector will benefit the manufacturing sector, as it was the third highest value-added multiplier in Malaysia after the mining and services sectors.
“We predict among others the fish and aquaculture industry to be the main focus in Malaysia’s long-term national agriculture strategy. This will eventually cool the escalating fish prices,” the research house said.
Efforts to boost the agriculture industry will further strengthen the country’s food security and support the aspirations of the Shared Prosperity Vision 2030, it added. – Jan 21, 2020, Bernama
